Market's evolution 05 of December to 09 of December 2016
Monday, 12 of December 2016
Draghi's remarks following the meeting of the European Central Bank marked the pace of the market by the end of the week.
In line with expectations, interest rates remained unchanged and the buying program was extended until December of 2017. And although rumors were denied regarding the implementation of tappering, the possibility of bringing a reduction in purchases of monthly assets to 60.000 million euros from the current 80.000 million EUR in April, a factor that triggered sales in the government bond markets anticipating future cuts in the purchasing program.
Against this background, to which we must add that as of this month will include debt issues with a maturity of one year, the euro was pressured down on its main pair, leading the EUR/USD to levels of 1,0559 (-1%). On the other hand, the selective ones benefited with a rebound of up to +6,50 in the DAX and the IBEX-35 closing at levels of 11.203 and 9.169 respectively, the STOXX50 was not left behind after going up by +6%, now at levels of 3.197.
In the macroeconomic context, the data reported continued in positive with rises of +5% in new factory orders in Germany and the improvement in the Bundesbank forecasts.
On the negative side, we highlight the delicate situation of the Monte dei Paschi di Sienna bank after the ECB rejected the request for an extension in the term to obtain private financing, which opens the possibility that the rescue will be carried out by the Italian State as Nowotny announced. However, the president of the Eurogroup, ruled out that this situation could trigger a new crisis in the Euro Zone.
In the North American continent, new data published, supported a raise of rates in the meeting of the Federal Reserve that will take place on Wednesday. The leading indicators remained at a consistent expansion levels and employment data at highs.
The evolution in the American parquets was settled reaching new maximum levels in the selective ones. The technology Nasdaq Composite increased +3,60% to levels of 5.444 and by +3% in the S&P500, now at levels of 2.259.
Positive developments also in Japan, where Kuroda took advantage of Thursday's appearance to announce that new rebounds in inflation levels of up to + 2% were identified, benefiting from private consumption and reaffirmed the BOJ's willingness to maintain support for the economy . Also, the PMI indicators seem to have reversed the downward trend (now at expansive levels of 51,8 in the services sector).
Asian picks rallied, especially in the NIKKEI225 driven by Kuroda's support in his last appearance, scoring a +3,10% (closing at levels of 18.996), while the Hang Seng closed flat with a smooth rise of +0,87% (Now around 22.760).
As for commodities, Brent's Barrel returned to play the week, maintained levels of 54 USD/Brent and we expect that the gains will be extended during the next days after the agreement reached by the OPEC and non-OPEC members is announced.